Making the G20 Summit Process Work: Some Proposals for Improving Effectiveness and Legitimacy

CIGI G20 Papers | No. 2, June 2010 Making the G20 Summit Process Work: Some Proposals for Improving Effectiveness and Legitimacy

Barry Carin, Paul Heinbecker, Gordon Smith, Ramesh Thakur

Addressing International Governance Challenges The Centre for International Governance Innovation

Table of Contents Summary

Summary 2 This paper assesses the current context following the G20 summits in Washington, London and Pittsburgh and the Introduction 3 prospects for the forthcoming meetings in Canada and Korea in 2010 and beyond. It asks which global problems Context 3 could be on future agendas and how to achieve both The Future Agendas 5 effectiveness and legitimacy. It discusses the composition of the G20, working and coordination methods in the Composition 6 preparatory process, and effective outreach processes. The main conclusions are: A “Non-Secretariat” 10

Outreach and Consultation Processes 11 • The G20 should limit the agenda to the financial crisis issues and contain the inevitable pressures to The Non-G20 11 broaden the agenda by inviting other groups and organizations to provide recommendations for G20 Parliamentarians 12 consideration at future G20 meetings. Business 12 • Composition is an intractable problem, with no Research Community 12 correct answer. Legitimacy and efficiency could be attained by the Europeans speaking with one voice Conclusion 13 rather than six or eight, while the host country invites two or three “guests.” Works Cited 13

Acronyms and Abbreviations 15 • To reconcile the need for extensive preparation with the antipathy to formal bureaucracy, the G20 should About CIGI 15

About the Authors Figures and Tables Barry Carin is a CIGI senior fellow and associate director of the Figure 1: Options for Composition 8 Centre for Global Studies at the University of Victoria. He was assistant deputy minister in Canada’s Department of Foreign Affairs and International Trade and served as Canada’s high commissioner to Singapore and representative at the OECD.

Paul Heinbecker is a CIGI distinguished fellow and director of This paper was originally prepared for the CIGI conference on the Wilfrid Laurier University Centre for Global Relations. He “International Governance Innovation: Issues for the 2010 was assistant deputy minister in Canada’s Department of Foreign Summits,” May 3–5, 2010, Waterloo, Canada. Affairs and International Trade and served as ambassador to Germany and as permanent representative to the United Nations.

Gordon Smith is a CIGI distinguished fellow and executive director of the Centre for Global Studies at the University of Victoria. He was the deputy minister in Canada’s Department of Foreign The opinions expressed in this paper are those of the author and do not necessarily reflect the views of The Centre for International Governance Innovation or its Board of Directors and/ Affairs and International Trade and his diplomatic posts included or Board of Governors. ambassador to the European Union and NATO.

Ramesh Thakur is a professor of political science at the University Copyright © 2010, The Centre for International Governance Innovation. This work was carried out with the support of The Centre for International Governance Innovation (CIGI), of Waterloo and was senior vice rector of the United Nations Waterloo, Ontario, Canada (www.cigionline.org). This work is licensed under a Creative University in Tokyo and an assistant secretary-general of the Commons Attribution — Non-commercial — No Derivatives License. To view this license, visit (www.creativecommons.org/licenses/ by-nc-nd/3.0/). For re-use or distribution, please include United Nations. this copyright notice.

2 Making the G20 Summit Process Work: Some Proposals for Improving Effectiveness and Legitimacy

set up a summit “non-secretariat.” This nimble, non- grouping. Opposition evaporated in the face of the scale bureaucratic structure could be located for one year of the 2008 crisis and the necessity to reach broader-based in the host country, headed by the G20 troika sherpas, agreement than the G8 could deliver. The previously with two being non-resident. scheduled November 2008 G20 finance ministers’ meeting in Washington was then upgraded to a leaders’ summit. • More systematic and structured consultations with What is most significant is that it was the US that decided non-G20 countries, civil society, parliamentarians, that the G8 leaders and the G20 finance ministers were not the policy research community and the private sector enough to deal with the financial crisis.2 In Washington, could add to legitimacy and effectiveness. the leaders agreed to meet again in London, and then another meeting was set for Pittsburgh, to follow up on the progress being made in response to the crisis. With the G20 leaders meeting this year in Toronto and then Introduction in Seoul, it appears that this leaders’ forum has become “the” forum for international economic cooperation. In the wake of the global financial crisis, the Group of 20 (G20) emerged as the “premier forum for international Most observers agree that the coordinated efforts economic cooperation” (U.S. Department of State, 2009). emerging from the three G20 summits so far have Global leaders met (for the first time as a group of 20) in contributed to a more rapid recovery than anticipated. Washington, and subsequently in London and Pittsburgh, In Washington, in September 2008, leaders drafted a when it became apparent that the existing political and plan and assigned specific tasks for implementation economic institutions — the International Monetary Fund by various institutions. In London, in April 2009, (IMF), the Group of 8 (G8), the United Nations (UN) or promises were made to increase resources for the IMF, the G20 grouping of finance ministers — were incapable repair the financial system and maintain the global of coordinating a response to the financial crisis in the fall flow of capital. In Pittsburgh, in September 2009, the of 2008. With the IMF viewed by developing countries communiqué focused on jobs and the real economy, with scepticism, the G8 unrepresentative of current global while re-endorsing previous promises and directing 1 realities, and the UN too large, another format was needed the Financial Stability Board (FSB) to monitor progress to bring the crucial decision makers together. Furthermore, on financial regulation. The Pittsburgh communiqué the participation of leaders at the highest level was needed. also incorporated policies on climate change and The decisions required to tackle the financial crisis went energy into the recovery agenda. beyond the boundaries of G20 finance ministers’ portfolios. The G20 has already delivered on several of the This paper explores potential actions to secure the commitments contained in the communiqués from these effectiveness and legitimacy of the G20, including the three summits. The former Financial Stability Forum possibilities for the G20 to expand its purview beyond (FSF) was upgraded to the FSB and expanded to include the financial crisis and act as a “global contact group” to all G20 members. On March 10, 2010, the FSB launched pursue policy consensus on various global problems. the Framework for Strengthening Adherence to International Standards. This initiative encourages

Context all countries and jurisdictions to raise their level of adherence to international cooperation and The G20 group of finance ministers from the leading information exchange standards, including by industrial and developing economies was established in identifying non-cooperative jurisdictions and assisting 1999 in the aftermath of the Asian financial crisis; it was a them to improve their compliance. (FSB, 2010) joint initiative of Canada’s Finance Minister Paul Martin and US Treasury Secretary Lawrence Summers. The G20 FSB members will undergo periodic peer reviews. The finance ministers were successful in forging consensus first peer review on implementation of the FSB Principles on a framework for debt restructuring and the need for for Sound Compensation Practices and their Implementation IMF reform (Goutier, 2010). In 2004, recognizing the Standards was completed in March 2010. The jury is out on changing global dynamic, Prime Minister Paul Martin the effectiveness of the proposed peer review.3 proposed raising the G20 to leaders’ level. Initially there was resistance, including in Washington, to yet another 2 US Treasury Secretary Henry Paulson had a key role requesting a separate meeting with the G20 countries (McKinnon, 2008). 1 Ramesh Thakur has remarked that “the gap between promise and performance [of the UN] remains unacceptably large” (Thakur, 2002). 3 See Alloway (2010).

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In addition to the work of the FSB, the Organisation Internal dynamics could interfere with the G20’s potential for Economic Co-operation and Development (OECD) to be the successful contact group for future global has been providing advice and policy analysis to governance. There are divisions within the G20 countries, governments, and developed a comprehensive strategic for example, on China’s monetary policy and currency plan to support the implementation of the Framework controls, the pace at which emerging and developing for Strong, Sustainable, and Balanced Growth, which the countries are recovering from the crisis, the timing for G20 launched at Pittsburgh. The OECD has focused the removal of stimulus packages, and the management on coordinated employment policies and standards of of trade protectionism. There is a “G2 operating at the transparency and exchange of information in tax matters. heart of the network … US-China negotiations on key Since April 2009, over 90 tax information-exchange issues will be a central factor in shaping dynamics and agreements have been signed and over 60 tax treaties negotiations with other members” (Martinez-Diaz and have been negotiated or renegotiated to incorporate the Woods, 2010). Perhaps the G20 is the answer to a G2; the standards of transparency (Gurría, 2009). G20 must overcome these obstacles to form a consensus and deliver on past promises. In working with international institutions to promote multilateral efforts, the G20 played a pivotal role in Chinese and US interests diverge, despite a mutual containing the recession by coordinating national interest in financial stability. Tensions arising from expansionary monetary and fiscal policies, as well as such concerns as arms sales to Taiwan, the Dalai Lama drawing out general principles of strengthening financial and Google censorship trump cooperation in the G20. regulation and supervision. What happens at the G20 The emphasis on the divergence of interests is a weak summits, in June in Canada and in November in Korea, argument — the G8 would be subject to the same criticism will be important for assessing if the G20 can emerge — as given the split between Russia and the US on issues such Paul Martin envisaged — as the forum in which leaders as NATO expansion or Georgia. We cannot deal with meet to form consensus and coordinate policy for various global deadlocks by confining discussion only to the like- global issues, including climate change. Several obstacles minded. To solve global problems we must have countries and concerns persist. at the table that have different views and interests.

In grading the G20’s performance to date, Ngaire Woods The G20 has the potential to combine the best of the G8 said the group has: and the UN while avoiding their drawbacks:

[D]one very well in preventing the wealthy The G20 offers the best crossover point economies from seizing up. They coordinated between legitimacy (based on inclusiveness quickly and they took some decisive cooperative and representation), efficiency (which requires action. I think they get high marks for that. They a compact executive decision-making body) have done a little bit — 5 out of 10 — on financial and effectiveness (where those who make the regulatory reform. But when it comes to easing decisions have the greatest ability to implement the impact of the crisis on developing economies, or thwart them). Its purpose would be to steer [they get] 3 out of 10 because they have been high policy consensus and coordination and mobilize on promises but low on delivery. (Goutier, 2010) the requisite political will to drive reform and address global challenges… It could combine The inability to meet past promises is a constant the personal engagement and informality of criticism of the G20 (and G8). Reforms agreed upon G8 summitry, the detailed preparation and in Pittsburgh are threatened by countries seeking follow-up work required to vest summits with “to ensure that their own financial sectors don’t lose successful outcome and delivery and the unique a competitive edge” (Clark, 2010). Reforms at issue legitimacy that only the UN can confer as the sole include bank-sector taxes, rules requiring more capital authenticated voice of the collective international to back lending and minimize leveraged trading and community. Thus, the real challenge is how to the means to keep tabs on big international institutions’ retain the positive attributes of the existing major cross-border activities. The FSB recently reported that nodes of global governance while shedding their many nations are lagging behind on reforms, although pathologies. (Thakur, 2010) progress has been made in major financial centres such as the US, Britain, Germany, France, Japan and Hong Kong (Torobin, 2010). Inconsistent approaches to exit strategies and premature withdrawals of some measures could jeopardize global stability.

4 Making the G20 Summit Process Work: Some Proposals for Improving Effectiveness and Legitimacy

The Future Agendas (Shankaran and Matthew, 2009). In contrast, Brazil, Russia, India and China have stated that the main forum The effectiveness with which the G20 confronts the for negotiating climate change should be the UNFCCC. financial crisis and delivers on its Washington, London and Pittsburgh commitments, and those to be made this year in Despite the views of some G20 countries that an alternative, Toronto and Seoul, will determine its credibility and value smaller forum is required to advance climate change as a forum for managing other global challenges. Without negotiations, it appears that neither Canada nor Korea will sustained coordinated efforts in the recovery phase of the use their positions as the 2010 G20 chairs to add climate financial crisis and its successful resolution, the G20 will change explicitly to the summit agendas. Nevertheless, it not continue as an influential forum, let alone expand its is likely that climate change considerations and the need portfolio beyond international economic cooperation. for green growth will permeate the financial and economic discussions at the Canadian and Korean summits. The enlargement of the agenda, if any, will take place 5 progressively. This is the experience of the G7.4 There is an Several G8 members, who have, or think they have, greater emerging consensus that the G20 has helped mitigate the relative influence than they do in the G20, may want to impacts of the crisis and has proven effective; agreement maintain the G8 for as many issues as possible (Canada, reached in the next six months on some of the tougher Italy and Japan share a strong interest in maintaining the issues will augment this consensus. The G20 could move G8). In principle, Russia has called for the G20 to adopt its agenda beyond economic issues to eventually include the international economic issues from the G8 agenda development, climate change, nuclear proliferation, and leave political issues such as non-proliferation, global public health and other major governance issues with threats and regional stability as priorities for the G8. Canada global political, social, environmental and economic echoes this call, and will use the 2010 G8 summit to focus consequences. G20 countries stated, in the Washington on development and international security issues and the communiqué, that they “are committed to addressing G20 summit to function as an economic forum. Korea also other critical challenges such as energy security and supports a financial focus to the G20, and, in 2009 argued climate change, food security, rule of law, and the fight “not to dilute the focus of the Summit by adding other against terrorism, poverty and disease.” heavyweight issues such as climate change...” (Sakong, 2009). Korea, the first recipient-turned-donor country of the Debates within the G20 have not addressed climate change OECD, will introduce economic development into the G20 per se, but rather the financial aspects of dealing with and will seek to “bridge the perspectives” of the advanced climate change and how economic growth, post-crisis, and emerging economies in the G20 process (Sakong, 2010). must be sustainable. The discussions within the G20 that have occurred on climate financing focused on financing Global challenges are interconnected. Leaders cannot options, not on who pays what — a divisive issue between discuss the international financial system without emerging economies and developed countries. To include also discussing trade, development and international elements of climate change solutions in G20 discussions, institutions. Previous G20 communiqués mentioned France has indicated it will use its G20 chair in 2011 to climate change, trade, energy, food security and push for taxes on financial transactions to raise money to development within the context of countering the financial fight climate change (Fogarty, 2009). crisis. In Pittsburgh, climate change and trade were on the agenda, with little visible effect. The potential does exist The slow progress in the United Nations Framework for these “heavyweight” issues to become the focus of Convention on Climate Change (UNFCCC) on a new future G20 meetings. To a large extent, how and when the climate change deal has prompted the EU to view the enlargement of the agenda occurs is up to the G20 chairs. G20 as potentially one of the more effective forums for However, leaders will decide what they want to talk these negotiations, although the Europeans “remain about — and careful preparation and choreography can firmly committed” to the UNFCCC. Following the recent be upset by sudden crises. Leaders are perfectly capable 6 EU summit, then UK Prime Minister Gordon Brown of deciding to have unplanned discussions or of adding supported the EU position, stating, “I believe we need new themes for subsequent meetings. to find a new way, perhaps with a larger group of the G20 to bring the talks together” (Philips, 2010). The US has promoted the idea of using the G20 as the forum for pursuing a solution to financing climate change 5 Having more “air time” in a smaller group does not necessarily translate into more influence. 4 In fact, expansion of the G7 to the G8, adding Russia, took place over five years. 6 For example, transnational crime in 1995.

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Composition representation in international organization. To put it more directly, only one voice should speak for the The G20 represents the new dynamic of global politics euro in the international field. Where different actors (Bradford, Bhattacharya and Linn, 2010). No international internally share competences, they should coordinate in forum can be effective as a global coordinating committee advance who will speak and vote in the framework of without having Brazil, China and India involved. The G20 an inter-institutional agreement. This institution is then has been functioning for ten years at the finance ministers’ considered trustee of the other actors whenever their 8 level, and has a history of cooperation and consensus competences are at stake. (Weinrichter, 2000) building. The group includes ten nations from various regions of the non-western developing world, six Asian Stewart Patrick of the US Council on Foreign Relations nations, three Islamic nations, and is large enough and outlines three other options for a global coordinating diverse enough to closely reflect the political economy of group: the G8, a G13 (or some intermediate group), and the world today (Bradford and Linn, 2010). At the same “variable geometry.” The appeal of retaining the G8 is time, it is still a small enough group that its members most felt by the smaller members, such as Canada and can develop relationships and establish trust, leading to Italy, who will see their role and influence reduced in a successful collaboration. larger forum. Patrick notes that the G8 “provides a more congenial forum than the G20 for discussing sensitive Although it seems we have arrived at a point at which the political and security matters” (Patrick, 2009) because of G20 will persist as the global economic forum, there is a their shared economic and political values (Russia aside— lively debate about which countries should be at the table. admittedly a very large caveat), and therefore it is also in Africa is underrepresented—with only South Africa at the the other Western members’ interest to safeguard the G8. table. Europe is overrepresented, especially since Spain7 and the Netherlands were invited to the Washington G20 An intermediate forum, such as a G13, is less cumbersome and will be in attendance again in Toronto. Pittsburgh than a G20, but more inclusive than the G8. Brazil, China, involved the leaders of ASEAN and the African Union India, Mexico and South Africa have been meeting with (AU). The Nordics have lobbied for a seat. Poland has been the G8 through the Heiligendamm process since 2006, and vocal about joining the group, based on its size. There is no would be the likely additions — France had supported this clear criterion for membership. One could argue that GDP composition. The G13, however, does not include a Muslim per capita is a better measure of a country’s capacity to country. Adding one of Turkey, Saudi Arabia, Indonesia contribute to solutions in poor countries; GDP aggregates or Egypt and increasing it to the G14 could resolve this the output of many impoverished farmers. concern. The difficulty is deciding which of those Muslim countries might be included. In 2009, France announced Several options — all with their pros and cons — have that when it hosts the G8 in 2011, it will convene 14 leaders: 9 been proposed. the G8 +5 plus Egypt (Zeenews, 2009).

As in any international grouping, there is a trade- Variable geometry is characterized as a “pragmatic option” off between increased size (greater legitimacy) and in which the countries participate based on their interest in allegedly greater efficiency. In 2000, Norbert Weinrichter a particular issue and their capacity to address it. Variable argued for a G3: geometry could rotate around a core group (either the G8 or the G13) to reduce transaction costs. A current example of variable geometry is the Major Economies Forum (MEF) Generally, cooperation gets easier if the number of on Energy and Climate Change. The G13 countries, plus partners decreases and transaction costs are reduced. Australia, Indonesia and Korea, comprise this group; they Thus, replacement of the G7 by a “G3” should make met six times in 2009 and are planning to meet again in 2010. things easier. One simple conclusion from this is that A second example is President Barack Obama’s April 12-13, efficient cooperation requires a single and stable player 2010, Nuclear Summit in Washington, which discussed in external relations. Many authors have suggested future steps to secure vulnerable materials, combat nuclear that the community institutions and the Member smuggling, and deter, detect and disrupt attempts at nuclear States should take all necessary steps to ensure the terrorism. There were 44 countries at the table — too many best possible cooperation in regard of the unity of to expect serious progress at the meeting itself.

7 “The scramble for a seat in Washington has turned the G20 meeting 8 The prospect of the Europeans being able to agree to speak with one into a national fixation in Spain and provided fodder for facile comedy: voice is close to absolute zero. In any case a G3 would be ruled out on In a television skit, a gangly Zapatero impersonator bangs desperately legitimacy grounds. on closed doors and showers Sarkozy with kisses; in another, he complains he cannot find his G-spot.” (Burnett and Bennhold, 2008) 9 However, Turkey and Indonesia dwarf Egypt in economic terms.

6 Making the G20 Summit Process Work: Some Proposals for Improving Effectiveness and Legitimacy

AP Photo/Carolyn Kaster

The proliferation of summit meetings is itself a problem. Regardless of which countries are included in the G20, There is a limit to the number of summits that the US or those excluded will be unhappy and decry the group’s Chinese presidents will attend. The question arises as illegitimacy. The Pittsburgh Summit, unfortunately, had to whether consolidation makes sense, given the time 55 seats at the table. Of course, 20 of these were finance burdens of travel to these events. Perhaps one longer ministers or bankers — but 35 are too many. Format event, over three days, makes more sense than a series of matters — one seat per country (elbow to elbow) should individual meetings. be the rule to deliver the requisite informality.

In a recent speech delivered at the UN, Singaporean Twenty at the table is the limit for an effective group. Ambassador Vanu Gopala Menon encouraged the Expansion of the G20 (yielding to the pressure of the Spanish, G20 to adopt a variable geometry approach in its Dutch and Nordics, and accepting seats for ASEAN, the ministerial meetings to strengthen its engagement African Union and the Caribbean Community (CARICOM)) with non-members. Ambassador Menon further will inevitably result in the creation of a smaller, executive supports the inclusion of different countries in the group operating in a less transparent manner. G20 decision-making process for issues in which these countries have a vested interest. Too many In the future, perhaps Europe should have fewer seats. people at the table preclude the intimacy and Europe is over-represented in the executive bodies of many personal connection that was the prime contributor international institutions. Colin Bradford and Johannes to past successful G7 summits. Complexity increases Linn suggest that, in an ideal world, Europe would only when different people are present for different issues have one chair and one voice in international institutions. — which in many cases are interlinked. An alternative could be to reduce their seats to five (the logic being that the Americas, with a larger total GNI and The feature of G7 meetings most appreciated by population than Europe,10 have five seats) and let them leaders was the opportunity for meals with their decide among themselves who will fill those seats. counterparts, with only whisper interpreters present — their officials being banished from the room. The value of this feature is clearly more problematic the 10 In 2008, Argentina, Brazil, Canada, Mexico and US had a combined population of US$675.7 million and combined GNI, US$18.6 trillion. The larger the number at the table. EU population was 497.6 million with a US$17.3 trillion GNI. (World Development Report, 2010.)

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Figure 1: Options for Composition

a. Group of 20 b. Group of 20: Total of 5 seats for European countries – EU discretion who holds those seats

c. Group of 20: d. Major Economies Forum: – Germany, Italy and UK, + UN, ASEAN, AU Meetings on energy and climate change

Figure 1 depicts the options for composition of a global Options presented depict various grouping that have coordinating group with 20, or close to 20 members. been proposed for a global coordinating committee. The The MEF last met in October 2009, and is planning to five countries proposed in Option E have been meeting meet in Spring 2010. It is currently unknown how many on the margins of the G8 summits. Option G involves additional groups will be invited to the G20 is June replacing Canada and Italy with China and India.11 In meeting in Canada and to the November meeting in variable geometry, the base group could either be 8, 13, 14 Korea. Options B and C are permutations of the current or 20. Criteria could be set for deciding which countries are G20 and are proposed to redress the over-representation invited for which issues based on interest, capacity and or of Europe. In option B, there would be five European degree to which the country will be affected. seats total, and the EU and its members could decide who and how those seats would be filled. Option C removes the individual European countries, except 11 By any reasonable criteria concerning the capacity to contribute to France – they host next year – and redistributes those global solutions, Canada has excellent credentials: GDP in 2050, economic seats to regional organizations. efficiency, educational attainment, the UNDP human development index, land mass, measures of innovation potential, control of energy resources, carbon sinks, trade, direct foreign investment abroad, military expenditure, and the Chinese concept of comprehensive national power. But will this be enough? See Carin and Mehlenbacher (2010).

8 Making the G20 Summit Process Work: Some Proposals for Improving Effectiveness and Legitimacy

e. Group of 13 + Brazil, f. Group of 14 + Brazil, China, India, Mexico, South China, India, Mexico, South Africa Africa, *Egypt, Indonesia, Turkey, or Pakistan

g. +2; -2 h. Variable Geometry - Canada and Italy; + China and India Having a base group countries and then inviting additional countries depending on topic/issue

i. Constituencies modeled on IMF system

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Canada is inviting Ethiopia and Malawi (holder of the the increased number of participants relative to the G8, the African Union Presidency) – along with the Netherlands, challenge for continuity is more extreme. The preparation Spain and Vietnam – as guests to the Toronto G20 meeting. and follow-up process for the G20 summit will be more While this step clearly augments the African representation, demanding as it involves many more players, not to mention it is unlikely that these countries will be involved in the more frequent change in leaders. It would be very onerous, for meeting preparations. There is a risk of petulant ingratitude example, for the host sherpa to visit all the member countries. at “just being invited for dessert.” In any case, adding more The preparation of a G20 meeting at leaders’ level is also more seats to the table risks rendering the discussion inefficient. challenging than preparing for G20 finance ministers’ meeting. One way forward would be for the EU representatives to Finance ministers and their officials meet many times during commit to speak with only one voice at the summit. the year. The G20 summit will have a more comprehensive agenda relative to the G20 finance ministers’ meeting. In addition to the current G20 being over-represented by Europe, it is under-represented by Africa and smaller The G20 will meet at leaders’ level twice in 2010 — in states. In 2003, Klaus Schwab called for a “Partnership Toronto in June, and in Korea in November. The hosts 21” (P21) to act as a new global group to tackle global plan each meeting according to their own agendas. The challenges. The P21 call was for ten developed and ten (“of challenge is to manage and organize the summit to ensure the most important”) developing countries, plus seats for continuity, institutional memory, and the implementation the UN and the EU.12 Schwab included both Nigeria and of plans and promises, and yet be driven by capitals. The South Africa. There is a trade-off between legitimacy and need for extensive preparation must be reconciled with effectiveness. Taking the current 20 countries as given the antipathy towards creating a formal bureaucracy for (at least for now), effective mechanisms for outreach and summits. Preparation must be done through a nimble, consultation will be essential to ensure that the activities “non-bureaucratic” secretariat — controlled by leaders and decisions reflect as broad a spectrum of views as — that would provide administrative and other support possible. Figure 1 depicts various options that have been to the overall activities of the G20. proposed for a global coordinating group with 20, or close to 20, members. Currently, with the G20 chair rotating among members, the incumbent chair temporarily establishes an informal secretariat for its term to coordinate the group’s work A “Non-Secretariat”13 and organize its meetings (Republic of Korea, 2010). Korea’s is more formal — called the “Presidential G20 Committee.” At the finance ministers’ level, the G20 The preparatory process for summits is both an art and a chair is part of a revolving three-member management science. A critical role is played by each leader’s personal “troika” of sherpas that consists of the current chair representative , called the “sherpa.” The country hosting and the immediately preceding and succeeding chairs. the annual G8 event organizes the summit, which takes The management picture at leaders’ level is less clear place each year in June or early July. The incoming with both Korea and Canada hosting the G20 in 2010. host takes over on January 1 and generally calls several Currently, there appears to be a “quintet;” the past hosts preparatory meetings involving officials from member — the UK and US, Canada and Korea, and France (The countries. It is customary for the host G8 sherpa to visit White House, 2010). each of his or her counterparts in December before the start of the presidency to seek views and establish a One way to address the management challenge — to personal relationship. Since 1995, the host has convened reconcile the need for extensive preparation with the a meeting of all the member sherpas after each summit, antipathy for formal bureaucracy — is to set up a G20 in the latter part of the year, to review progress onthe summit “non-secretariat.” Leaders would not want to commitments made at the leaders’ meeting. see a bureaucratic structure take over the G20 summit. The existence of a heavy secretariat structure could The G8 summit process has been criticized for the lack of undermine the commitment by the national government continuity and implementation monitoring. The G20 summit departments and agencies to the G20 summit processes. will have to demonstrate that it can do better. The preparation Formally, the proposed non-secretariat would be located of a G20 meeting is much more complex than a G8. With for one year in the host country. Alternatively, it could be hosted in one of the troika countries and move every 12 See Government of Slovenia (2004); and The Hindu Business Line (2004). three years. It would be headed by the G20 troika sherpas, with two being non-resident. There would be no separate 13 A non-paper in diplomatic jargon provides text for a proposed “executive secretary” or “managing director.” agreement offered informally for discussion without committing the originating author to its proposals.

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Effective logistical and technical support for the G20 background); can be provided by seconding or cross-posting high- level staff from member countries of past, present and • Follow-up of summits (monitoring implementation future hosts — forming a troika — for three-year terms. of commitments); and Seconded officials would maintain the essential contact with their own leaders and host government. This could • Managing relations with non-member countries and ensure that the secretariat work was not isolated from organizations. official policy direction. Officials would remain on their home government’s payroll. There are precedents. Some Linn suggests that given the sensitivity concerning officials have been seconded ad hoc to host countries. In expansion of international bureaucracy and the aversion an effort “to make the G20 work for the future,” Shriti toward the formality of a new structure, it may be better Vadera, a former British cabinet minister, left her post to refer to the proposed administrative support unit as to assist the Korean government as a liaison between “G20 Summit Staff” (Linn, 2009). the outgoing British and incoming Korean G20 chair. Additionally, the UK has seconded a senior official to Canada in the run-up to the June meeting. Outreach and Consultation Processes Such administrative staff could be supported by technical staff from member countries or international A variety of consultative mechanisms will be required organizations who would work on the summit agendas’ to ensure that voices from developing countries and thematic issues. Johannes Linn proposes a “permanent” non-G20 countries are heard, and that the process does secretariat be located for three-year intervals in the capital not descend into bloc politics. COP-15 in Copenhagen of a troika country (Linn, 2009).14 Placing the secretariat in recently demonstrated the inability of 193 countries to act one location would ensure a more integrated approach as a negotiating forum (and the inability of a group of between secretariat administrative, technical and five to deliver anything meaningful). The challenge is to logistical staff. A “permanent” secretariat would also incorporate the wide range of interests and perspectives provide a more integrated and coordinated approach into this smaller group without losing effectiveness. to summit preparation and follow-up, to management The legitimacy of the decisions and directions taken of external relations and outreach, and to general by the G20 depends on the degree to which those left communications. With these staff carrying out their work out feel represented by the process — the greater their in a permanent location, the chairs, the three sherpas perception of inclusion, the more likely they will be to forming the troika, could remain in their host countries adopt or endorse G20 policy positions. As such, despite and manage secretariat work remotely. Alternatively, its informality, the G20 must complement its activity by quarterly meetings of the sherpas, at the call of the host reaching out to other governments as well as to business, country, could act as the coordinating group to supervise civil society and the policy research community. Its a handful of staffers. governance model should be to consult and cultivate, not to command and control. Promoting transparency and Stronger liaison contact points and implementation participation will buttress the G20’s legitimacy. reporting requirements could be established in the key international institutions that are tasked with following up Official circles have an incentive, if not a prejudice, to on G20 summits. Alternatively, existing structures could be minimize peripheral meetings — for example, ministerial asked to provide support (as was the case with the OECD meetings of environment, health or energy ministers.15 in the case of the “Heiligendamm Process” of the G8). The Time is limited and cacophony from the full spectrum of small budget of the secretariat would be funded in equal petitioners is not constructive. To promote transparency parts by the members of the current troika. and participation, if only to buttress its own legitimacy, the G20 could establish systematic processes to hear other The functions of this “non-secretariat” secretariat would voices. Some suggestions follow. be to provide support for:

• Preparation of the summits (agenda and technical The Non-G20

14 Linn suggests it be located in an emerging economy – we think not and cite the UN Environment Program in Nairobi as a cautionary example of the risks of placing headquarters in a city 15 On the other hand, the Koreans plan a Youth 20, a business event, that is not fully developed. and a G20 tourism conference.

11 The Centre for International Governance Innovation

Countries not in the G20 are concerned about not having 2010 to broaden the dialogue and develop a better sense of a presence. Countries like the Nordics, Poland and those priorities and policy approaches prior to the summit meetings. in the Caribbean believe they have the weight to justify their presence, or the peculiarities and vulnerabilities that need to be heard. The Heiligendamm Process was established to organize a dialogue between the member states of the Business G8 and the important emerging economies on the biggest challenges facing the global economy. It institutionalized There is a need for a process to give a voice to business high-level dialogue on several issues—suggesting the OECD communities from member countries and provide advice as the platform (G7 Summit, 2007). The Heiligendamm and counsel on policies affecting business and industry. Process dialogue can be replicated between the G20 and Korea has recognized this need and will host a Business non-G20 countries. It would be important not to fall into Summit, at the same time as its G20 summit, “to bring the a trap whereby the G20 both imposes and specifies the private sector into the process” (Sakong, 2010). In Davos, process. Consultations should take place to ensure joint in 2009, HSBC Group chairman Stephen Green called for ownership of the future process. In order to work with the the setting up of a “Business 20” forum comprised of the G20, non-G20 countries could strengthen networks among world’s largest companies, including from the developing themselves “to coordinate their policy positions and to build world, with a focus on those with international operations. up their capacity in areas in which the G20 pronounces” The commentary on his proposal highlighted the potential (Martinez-Diaz and Woods, 2009). for an almighty squabble as companies compete to be included … Deciding who gets to be in the G20 is ticklish enough and that only involves selecting 20 countries from The recently formed Global Governance Group (3G), a possible 200 or so. How much more tricky would it be representing 23 small- and medium-sized countries, is to find a consensus on which 20 companies should be in an example of one such network. Its purpose is to ensure the B20 from a sample size of thousands? (Sakong, 2010) that the actions and decisions of the G20 complement and strengthen, rather than undermine, the United Nations (Deen, 2010). The 3G is particularly interested in securing One solution would be to model the consultative mechanisms the formal participation of the UN Secretary General in of the Business Industry Advisory Committee (BIAC) and the G20 summits and preparatory meetings. Their view is that Trade Union Advisory Committee (TUAC) at the OECD. The committees could consist of representatives of associations or networks of major businesses, business organizations and for the G20’s deliberations to be translated into NGOs representing business views — such as the World effective actions on a global scale, they will Business Council for Sustainable Development (WBCSD), need to be more consultative, inclusive and and of major trade union alliances, respectively. The BIAC transparent…This will require the development and TUAC have advance access to the agendas of OECD of appropriate mechanisms to engage and consult Ministerial meetings and confer with the chairs and vice the wider U.N. membership (Deen, 2010). chairs of ministerial meetings preceding the event.

G20 Parliamentarians Research Community Previous experience with parliamentary assemblies (for South Korea could invite representatives of think tanks and example, NATO) indicates that there may be a useful research institutions from G20 countries to meet in Korea role for legislators in reaching common understandings. several months before its summits in November. A G20 Legislators could have a significant role in any future activity think tank network could be formally constituted, with a focused on accountability for summit commitments. Global small permanent secretariat being provided, possibly set Legislators Organization for a Balanced Environment (GLOBE up in partnership by Canadian and Korean institutions. The International), founded in 1989, consists of senior cross-party network would operate a “Track 1.5” process16. Membership members of parliament from all G8 countries and Brazil, could be extended to organizations in non-G20 countries. China, India, Mexico and South Africa; it shadowed the formal G8 negotiations and allowed legislators to work together in a “G8+5 legislators’ forum” outside the formal international negotiations. In an effort to develop productive consultative mechanisms, the GLOBE’s legislators’ forum could include 16 “Track 1.5” is an informal or unofficial process working outside parliamentarians from all G20 countries. Canada and Korea “Track 1” negotiation, mediation or government-to-government could co-host meetings of the group in Seoul and Ottawa in processes. Participants may include serving diplomats, private actors, researchers and people from other walks of life.

12 Making the G20 Summit Process Work: Some Proposals for Improving Effectiveness and Legitimacy

Conclusion Works Cited

For 2010, Canada and Korea should try to secure the Alloway, Tracy (2010). “Report on bank pay reveals G20 legitimacy of the G20 by succeeding in resolving the spilt,” FT Alphaville. March 31. Available at: http:// financial crisis. The preparations and deliberations should ftalphaville.ft.com/thecut/2010/03/31/192446/report- focus on formulating and implementing the necessary on-bank-pay-reveals-g20-split/. cooperative actions. Bradford Jr., Colin, Amar Bhattacharya and Johannes • Pressure should be directed at the EU representatives Linn (2010). “Europe’s Governance Stalemate Causes to speak with one voice (despite occupying six or Gridlock for Global Governance Reform.” Available more chairs). This would allow each host country to at: http://www.brookings.edu/opinions/2010/0424_ invite several “guests” to provide for better regional governance_linn.aspx representation without increasing the number of participants beyond an effective limit. Burnett, Victoria and Katrin Bennhold (2008). “Spain wants to go to Washington for financial meeting.” November • A “non-secretariat” to carry out preparations for 6. Available at http://www.nytimes.com/2008/11/06/ summits should become the norm, resident in the world/europe/06iht-madrid.4.17599727.html. host country, staffed by officials from the troika governments who would remain on their own Carin, Barry and Alan Mehelbacher (2010). “Constituting government’s payrolls. Other governments could global leadership: Which countries need to be around second staff on the same basis. The Head would be the summit table for climate change and energy the troika country sherpas. security?” Global Governance. Vol. 16: 21-37.

• Using existing models (parliamentary Clark, Campbell (2010). “Banking reforms urgent, Harper says assemblies, the OECD’s advisory committees, at G20 sherpas’ meeting” The Globe and Mail. March 18. the Heiligendamm process), G20 hosts should establish systematic consultation processes to Deen, Thalif (2010). “Big powers in G20 under scrutiny allow for meaningful, substantive dialogue by smaller nations,” The Sunday Times. March 23. throughout the preparatory process. Available at: http://www.sundaytimes.lk/100328/ International/int_01.html.

Financial Stability Board (FSB) (2010). FSB Framework to Strengthen Adherence to International Standards. Available at: http://www.financialstabilityboard.org/ publications/r_100109a.pdf.

Fogarty, David (2009). “Rich nations’ climate change cash offers still not clear,” Reuters. November 13. Available at: http://www.reuters.com/article/ idUSTRE5AC0Y820091113.

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Gurría, Angel (2009). “G20 Summit: An Update on the Move to Greater Transparency and International

13 The Centre for International Governance Innovation

Cooperation in Tax Matters,” Pittsburgh, September _____ (2009). “Achievements of the London G20 Summit 25. Available at: http://www.oecd.org/document/38/0 and Korea as a Troika.” Vol. 1, no. 4. Center for US- ,3343,en_2649_37427_43777958_1_1_1_1,00.html. Asia Policy. Available at: http://asiafoundation.org/ resources/pdfs/CUSKPNewsletter485x11.pdf. Hegel Goutier (2010). “G20: 5 out of 10 for financial reform; 3 out of 10 for support to poor nations,” Shankaran, Sanjiv and Liz Matthew (2009). “India may The Courier. January/February. Available at: http:// use UNFCCC to sidestep G-20 pressure,” Wall Street acp-eucourier.info/G20-5-out-of-10-for-fina.1008 Journal. September 20. Available at: http://www. .0.html?&L=http%3A%2Fwww.eddufresne%20 livemint.com/2009/09/20211947/India-may-use- %20org%2Fcomponents%2Fcom_htmlarea3_xtd- UNFCCC-to-sidest.html. c%2Fpopups%2Fpop%2Fikig. Thakur, Ramesh (2010). The North-South Divide, Global Linn, Johannes (forthcoming). “Some Preliminary Governance and the G20. Wellington: New Zealand Suggestions on a G-20 Secretariat,” The New Dynamics Institute of International Affairs. of Summitry Institutional, Policy and Political Innovations for G20 Summits: Issues and Essays. Colin Bradford and _____ (2002).”Reforming the UN: An encouraging start Wonhyuk Kim, eds. Korean Development Institute. under Annan,” International Herald Tribune. July 19. Available at: http://www.nytimes.com/2002/07/19/ Martinez-Diaz, Leonardo and Ngaire Woods (2010). “The opinion/19ihtedram_ed3_.html?pagewanted=1. G20 and the developing world,” Global Brief. February 19. The Hindu Business Line (2004). “To meet 21st Mackenzie, James (2010). “Sarkozy to press G20 on climate century challenges – Schwab Calls for new global funding,” Reuters. March 10. Available at: http:// grouping.” February 10. Available at: http:// www.reuters.com/article/idUSTRE62A2R120100311. www.thehindubusinessline.com/2004/02/11/ stories/2004021102130500.htm. McKinnon, John D. (2008). “Financial Crisis Emphasizes Importance of G-20,” Wall Street Journal- Blogs. The White House (2010). “Joint Letter from G20 Leaders.” October 11. Available at: http://blogs.wsj.com/ March 30. Available at: http://www.whitehouse.gov/ washwire/2008/10/11/financial-crisis-emphasizes- the-press-office/joint-letter-g20-leaders. importance-of-g-20/tab/article/ . Torobin, Jeremy (2010). “G20 urged to tighten reforms,” Patrick, Stewart (2009). “Prix fixe and a la carte: Avoiding The Globe and Mail. March 31. false multilateral choices,” The Washington Quarterly. Vol. 32, no. 4: 77-95. US Department of State (2009). “The Pittsburgh Summit: Creating a 21st Century International Economic Philips, Leigh (2010). “EU looks beyond UN on climate Architecture.” Factsheet. Available at: http://www. talks,” Business Week. March 30. Available at: http:// pittsburghsummit.gov/resources/129666.htm. www.businessweek.com/globalbiz/content/mar2010/ gb20100330_650576.htm. Weinrichter, Norbert (2000). “The World Monetary System and External Relations of the EMU: Fasten Pittsburgh Summit Resources (2008). Washington Your Seatbelts!” Available at: http://eiop.or.at/eiop/ Declaration. November 15. Paragraph 15. Available at: texte/2000-010.htm. www.pittsburghsummit.gov/resources/125136.htm. World Bank (2010). World Development Report 2010. Republic of Korea (2010). “What is the G-20?” Available Washington DC. at: http://www.g20.org/about_what_is_g20.aspx. Zeenews (2009). “France will transform G8 into G14: Russia and CIS General Newswire (2009). “Russia wants Sarkozy.” August 27. Available at: http://www. G8 to be chiefly political body.” December 29. zeenews.com/news558591.html.

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14 Making the G20 Summit Process Work: Some Proposals for Improving Effectiveness and Legitimacy

Acronyms and Abbreviations About CIGI

ASEAN Association of Southeast Asian Nations The Centre for International Governance Innovation is an independent, nonpartisan think tank that addresses AU African Union international governance challenges. Led by a group of experienced practitioners and distinguished academics, BIAC Business Industry Advisory CIGI supports research, forms networks, advances policy debate, builds capacity, and generates ideas for CARICOM Caribbean Community multilateral governance improvements. Conducting an active agenda of research, events, and publications, CIGI’s interdisciplinary work includes collaboration FSB Financial Stability Board with policy, business and academic communities around the world. FSF Financial Stability Forum CIGI conducts in-depth research and engages experts G8 Group of 8 and partners worldwide from its extensive networks to craft policy proposals and recommendations that G20 Group of 20 promote change in international public policy. Current research interests focus on international economic and GLOBE Global Legislators Organization for a financial governance both for the long-term and in the Balanced Environment wake of the 2008-2009 financial crisis; the role of the G20 and the newly emerging powers in the evolution IMF International Monetary Fund of global diplomacy; environment and energy, including climate change; and issues related to global and human MEF Major Economies Forum security.

OECD Organisation for Economic Co-operation CIGI was founded in 2002 by Jim Balsillie, co-CEO of RIM and Development (Research In Motion) and collaborates with and gratefully acknowledges support from a number of strategic P21 Partnership 21 partners, in particular the Government of Canada and the Government of Ontario. CIGI gratefully acknowledges TUAC Trade Union Advisory Committee the contribution of the Government of Canada to its UNFCCC United Nations Framework endowment fund. Convention on Climate Change Le CIGI a été fondé en 2002 par Jim Balsillie, co-chef de la WBCSD World Business Council for Sustainable direction de RIM (Research In Motion). Il collabore avec Development de nombreux partenaires stratégiques et leur exprime toute sa reconnaissance pour leur soutien. Il remercie tout particulièrement le gouvernement du Canada pour sa contribution à son Fonds de dotation, de même que le gouvernement de l’Ontario.

Publications Team

Senior Director for Publications: Max Brem Publications Coordinator: Jessica Hanson Media Designer: Steve Cross Publications Assistant: Matthew Bunch

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